Can you believe that it is already March? Time sure is flying this year! If you are like me, you may have made a vision board or list of goals for 2017. How is it going so far? If your goal was to save more money this year, you are in luck because I am going to break down 5 easy steps for you to save more money this year.
There are so many reasons that you might want to save more money this year. A few of them include:
- Fully funding your emergency fund
- Having more money to travel
- Having additional money to invest
- Saving for a down payment for your first home
- Increasing your net worth
Personally, one of my goals for 2017 is to increase my net worth. If you aren’t familiar with what net worth means, it is your total assets after subtracting all your liabilities. For example, add up your saving account, investment account, retirement accounts and other assets (like home/car/etc…). Then subtract all of your liabilities like any credit card debt, student loan debt,
Saving more money is the number one way that I am going to be able to increase my net worth. Check out these 6 steps that I am taking to save more money.
Change your Mindset
Before you actually start to save more money, you have to have the right mindset. Really think about why you want to save more money. Do you want to purchase your first home? Or save for a down payment on a car? How about to take an international vacation in the future?
Once you determine the ‘why’ it can really help to guide your focus and put you into the mindset of saving money. Also, it can help you differentiate between your wants and your needs. Once you have differentiated between your wants and your needs, it makes it easier to say no to activities and material goods that are not getting you closer to your goals.
In addition, it is important to believe that you can achieve your goals. Personally, I have a mindset of abundance. I believe in my heart that I will save more money. In the 3 months of 2017, my saving account increased more than it did all of 2016. Changing my mindset truly helped shape the amount of money that I have been able to save.
Cut Your Expenses
After you have changed your mindset, the next step is to cut your expenses. Sure it seems simple, but really sit down and think about all of the expenses that you can decrease. Some of the easiest expenses to decrease or cut altogether include:
- Cable Television
- Eating Out
- Shopping for non-necessities
- Subscription services
- Transportation expenses (think carpooling and less use of ride-sharing services)
What are other expenses that you have reduced or eliminated from your budget to save more money?
Related: Steps for Negotiating Monthly Bills
Make a Budget (and Stick to it)
After you have changed your mindset and made a list of all the expenses you can eliminate or reduce each month, it is time to sit down and create a budget. If you already have a budget that you regularly use (or prefer to use an automated budgeting application), you are one step ahead of the rest. However, it is a perfect time to review your budget.
First list out the amount of money that you would like to save each month. Then, address the total number of income that you bring in each month. Then subtract your saving amount and expenses from your income amount. Depending on your financial goals, use the extra money that you have left over to pay off any high-interest debt or have additional money for your savings account.
Automate your Saving
Now that you have determined the amount of money that you want to save each month (as well as the amount that is feasible for your budget), it is time to automate your saving.
There are a few ways to put your saving account on auto-pilot:
- Use a tool like Digit which regularly looks at your checking account and automatically saves money for you based on your saving habits. Get $5 when you try Digit using my link here. (One of my friends saved $1200 using Digit in less than a year without even trying since the app does the work for you. What are you waiting for? Go check it out here.)
- Set up an automatic transfer of money from your checking account to your saving account regularly. Most banks will allow this transfer for free.
- Split up your paychecks each month where a portion of your paycheck automatically goes into a separate bank account. Then you don’t see the money and don’t have an opportunity to touch it.
Related: 4 Best Apps to Automate your Saving
Hold Yourself Accountable
The last step to save more money this year is to hold yourself accountable. This is one of the hardest steps in the process. Holding yourself accountable means that even though your friends may invite you to happy hour, you have to say no because it isn’t in your budget. Or if you see a new pair of shoes that you want, instead of buying on impulse, you wait to purchase until you have met your saving goal for the month,
Now holding yourself accountable doesn’t mean that you need to give up all your true wants and desires. It just means that you need to put your financial goals first and stay true to your budget. Therefore, instead of going to happy hour two times a week, you may opt for once a week or every other week.
How are you going to save more money this year? Let me know in the comments!
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